Four consecutive months of rise in export to the U.S. indicate strong recovery in trade: Indian Embassy in Washington DC

India’s exports to the U.S. — the country’s largest outbound destination for goods — suffered a blow due to the COVID-19 pandemic in calendar year 2020 with outbound shipments declining 11.3 percent to USD 51.13 billion compared with 2019. But things are on a mend as December exports have posted a rise of 14.2 percent (year-on-year) to USD 4.89 billion, as per government figures.

 

Imports from the U.S. in January-December 2020 posted a sharper decline of 20.1 percent to USD 27.39 billion, which increased India’s trade surplus by 1.4 percent to USD 23.79 billion.

 

“In December 2020, Indian exports to the U.S. registered the largest monthly year-on-year increase with 14.2 percent growth. December also marked the fourth consecutive month of positive growth, indicating a strong recovery in trade,” according to monthly commercial report for December by the Embassy of India in Washington DC.

 

The export items which posted sharp increases in December 2020 include art of stone, plaster, cement, asbestos; food industry residues; oil seeds, miscellaneous grains, seeds; wadding, felt, twine and ropes; toys, games and sport equipment; ceramic products, and products of animal origin.

 

Indian exporters, too, have reported an increase in enquiries and demand from the major markets of the U.S. and the EU, which has given them hope for the future after suffering months of battering due to a decline in global demand.

 

According to a recent assessment done by the Engineering Export Promotion Council, which has 60 percent of its members from the MSME sector, the past few months have shown a robust recovery in the external demand from the major markets of the US and Europe.

 

“Unlike what has been observed in previous months, Indian exports, showing strong growth in December 2020, are not replacing existing market shares in the U.S. as there was commensurate increase shown in the imports of these products from the rest of the world,” the Indian Embassy report observed.

 

The Indian exports to the U.S. which registered significant decline in December 2020 include lead and articles, apparel and accessories, footwear, explosives, and railways and tramways equipment.

 

In the top 10 product groups where Indian exports saw a significant decline, the U.S. saw a decline in global imports in nine of the same product groups, indicating that India underperformed due to a significant decline in U.S. demand, the report stated.

 

India’s overall exports in April-January 2020-21 declined 13.58 percent (year-on-year) to USD 228.25 billion while its exports in January 2021 increased 6.16 percent to USD 27.45 billion compared with the same month last year, as per figures recently released by the Commerce and Industry Ministry.

 

Source: thehindubusinessline.com